Brazil's worst-ever recession has unexpectedly deepened; GDP dropped by 3.6 percent in 2016; almost as bad as 2015's 3.8 percent slump.
Brazil’s economic woes continue as the country’s worst-ever recession unexpectedly deepened at the end of last year.
Gross domestic product contracted by 0.9 percent between October and December.
For all of 2016 it dropped by 3.6 percent; almost as bad as 2015’s 3.8 percent slump. It was the eighth straight quarter of contraction.
Investment and consumption fall, unemployment at a record
Against a background of political turmoil and corruption scandals, the two-year downturn is now the longest and deepest on record for Latin America’s biggest country.
Investment fell 10.2 percent and consumption was down by 4.2 percent as joblessness hit a record high with nearly 13 million people unemployed – 11.9 percent of the workforce.
Finance Minister Henrique Meirelles said after the figures were announced that Brazil is still feeling the effects of the recession but is “clearly” starting to grow.
“Brazil is growing and the recession is over,” says Henrique Meirelles https://t.co/p7u6opGxYZ via
brazilmonitor</a>.com</p>— Brazil Monitor (BrazilMonitor) March 1, 2017
The downturn contributed to the impeachment of former President Dilma Rousseff last year and to the low approval ratings of her successor, President Temer.
The economy got little boost from the Olympic Games being held there and many of the venues and installations build at huge expense have since been abandoned.
Video: Rio 2016 venues lie abandoned and derelict six months after the Olympic Games pic.twitter.com/6ASmKVsIPm— Guardian sport (@guardian_sport) February 10, 2017
Experts are forecasting Brazil’s economy will grow only slightly this year. The consensus is for a very slow rate of 0.5 percent, which would be insufficient to reduce unemployment.
But some are not sure it can achieve that. “We see zero growth in 2017, or maybe just a little bit above that,” said Carlos Kawall, chief economist at Banco Safra, in São Paulo. “We should not see any big recovery this year; we will have to wait until 2018.”